Report: Madoff Says Banks Were ‘Complicit’ In Ponzi Scheme

Disgraced Wall Street financier Bernard Madoff said in an interview published online Tuesday that banks and hedge funds were “complicit” in his Ponzi scheme to fleece victims out of billions of dollars.

Madoff did not name any institutions in his series of interviews with The New York Times but said banks and hedge funds “were complicit in one form or another.” He said they failed to scrutinize the discrepancies between his regulatory filings and other information.

“They had to know,” he said in his first interviews for publication since his 2008 arrest. “But the attitude was sort of, ‘If you’re doing something wrong, we don’t want to know.”‘

Madoff spoke to the newspaper via e-mail and during a private two-hour interview at Butner Federal Correctional Complex in Butner, N.C., where he’s serving a 150-year sentence. The reporter who conducted the interviews, Diana B. Henriques, is writing a book about the Madoff scandal.

Madoff, who’s 72, touched on subjects including the effect of his crimes on his family, his son Mark Madoff’s suicide on Dec. 11 and the effort to recover money for his victims.

A court-appointed trustee seeking to recover money on behalf of Madoff’s victims filed a lawsuit this month against his primary banker, JPMorgan Chase, alleging the bank had suspected something wrong in his operation for years. The bank has denied any wrongdoing.

Madoff also said he had given the legal team of trustee Irving Picard “information I knew would be instrumental in recovering assets from those people complicit in the mess I put myself into.”

Picard did not immediately respond to an e-mailed request for comment from The Associated Press on Tuesday night. The Times said Picard declined to comment for its story.

About $10 billion has been recovered through asset sales and settlements.

Madoff also spoke to the Times about another defendant of a civil lawsuit brought by Picard’s team: the Wilpon family, owner of the New York Mets. He said Fred Wilpon and his brother-in-law Saul Katz “knew nothing.”

While the Wilpons claim they were victims who lost money in the Madoff swindle, Picard says they withdrew more than they put in and should have heeded warnings that Madoff’s claimed profits were too good to be true.

Madoff, touching on the subject of his devastated family, said that he was unhappy with the media coverage of his son’s death, calling it “disgraceful.”

Mark Madoff, 46, hanged himself with a dog leash in his Manhattan apartment on the second anniversary of his father’s arrest. He left behind a wife and four children, ages 2 to 18.

At the time of his suicide, federal investigators had been trying to determine if he, his brother and an uncle participated in or knew about the fraud. The relatives, who held management positions at the family investment firm, denied any wrongdoing.

Bernard Madoff also maintained in the interviews that his family didn’t know about his vast Ponzi scheme.

2 COMMENTS

They had to know, he said in his first interviews for publication since his 2008 arrest. But the attitude was sort of, If youre doing something wrong, we dont want to know.

As someone who dealed in real estate during that time period I agree with him on this point.Five years ago when it was unthinkable that real estate would go down in value the banks did in fact seem to turn a blind eye to the obvious deception that was being presented on mortgage loan applications.And yes I did hear bank loan officers explicitly tell people “We will just go with the information you give us” when people hinted that if they dig at all they will find the information to be untrue.